Defamation and social media: a liability perspective

20 May 2021 Myra Knoesen
Simon Colman, Business Head of Digital and Financial Lines at SHA Risk Specialists

Simon Colman, Business Head of Digital and Financial Lines at SHA Risk Specialists

Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

In recent years people have found themselves in hot water on social media for saying and posting things they believed were not harmful or offensive. With just one Tweet or Facebook post, we have seen users expose themselves to reputational damage, suits involving libel and/or slander, and claims due to incidents of publishing or broadcasting information.

Cause for concern

Looking back, to where we are now in terms of technology, the liability landscape has changed. We have come a long way in terms of our social media usage, and the fact that most people have cellphones where, for example, people secretly record things, poses significant risk.

Now that we have virtual meetings and other platforms, there’s also recordings that have caused harm and spread like wildfire across social media… ‘CPS board member caught recording badmouthing parents and teachers’, ‘entire California school board out after disparaging parents on accidental Zoom broadcast’.

FAnews spoke to Simon Colman, Business Head of Digital and Financial Lines at SHA Risk Specialists, about the liability issues around social media.

Social media usage and trends 

“Social media has gone viral. Literally. According to Statista, over the past few years we have seen massive growth in social media usage, and by 2025, it is expected that there will be over 26 million users right here in South Africa, of at least one of the platforms available,” said Colman. 

“If one includes messenger apps in the definition of social media you really are looking at close on 60-80% of mobile phone owners using Whatsapp and Facebook Messenger alone. We have also seen a shift further into short video content as the medium of choice. Whilst experts predicted this 10 years ago, it has been interesting to see mainstream news channels, now sharing content that has been generated by their viewers,” added Colman. 

“According to Twitter, they have over 2 billion video views every day. Eyewitnesses can upload and share their content long before the camera team from a network gets on the scene. Of course, what we have also seen in the past four to five years is a proliferation of fake news and content that is produced to deliberately manipulate people. This dangerous trend has led to mounting pressure on platform operators such as Facebook and Twitter to moderate and verify content. Balancing freedom of speech with a need to protect the public at large, has proved to be extremely tricky and somewhat elusive,” he said. 

Liability issues 

“Before the advent of social platforms, a consumer that may have been injured by a product would probably not have come into contact with other customers who had experienced the same thing. Tweets and posts have the ability to aggregate the experiences of large swathes of people and before the business owner has a chance to react, a class action in the digital space has already started to take shape. That is one side of the coin. On the other side, you have users interacting without thinking about the legal consequences of sharing harmful or false content,” said Colman. 

“Most of the cases here in South Africa have revolved around racially charged posts by individual users of social media. Given the history of our country, and the sensitivity around issues of discrimination, this is no surprise. Matters involving Penny Sparrow and Adam Catzavelos are two of the prominent cases that garnered a lot of media attention,” he added. 

“It is worth reading the Constitutional Court judgment in Le Roux vs Dey which clarifies that an action for defamation is designed to compensate a victim for any publication that injures the victim in their good name and reputation. The court set out the elements of defamation succinctly as: the wrongful and intentional publication of a defamatory statement concerning the wronged party. This could mean that even someone who simply re-shares defamatory content could find themselves in hot water,” he said. 

“Private individuals would generally need to extend their personal liability policies to cover social media related defamation actions, but it is doubtful that any underwriter would be comfortable providing defence costs for racially motivated incidents. Cover for defamation exists under most commercial liability and professional indemnity policies, and whilst social media isn’t specifically mentioned, it is generally accepted that publication of defamatory content could be on a social media platform,” continued Colman. 

Accountability in question 

“We should not dispute or ignore the benefits to society in ensuring that everyone has a voice. Socio-political issues can be brought out in the open without a shot being fired. The flip side of this is a lack of accountability on the part of the social media user. “News” stories are shared in one click, without going through any verification process and often with disastrous consequences. When news channels and journalists produce content, they are obliged to go through multiple layers of investigation and corroboration before they publish,” emphasised Colman. 

“Social media has also facilitated more efficient customer service response. Brands that monitor their social media channels can meet unhappy customers in cyber space and can attend to quality-control problems before they turn into legal problems. This is a real positive for consumers but does also create the opportunity for abuse where businesses may feel they are being pressured into settling matters with customers, even where no fault sits with the business,” added Colman.

Future ramifications 

“Social media isn’t going to go away, but given the pressure on platforms to curate their content and govern their users more stringently, it is possible that users could see a tightening up of the usage terms and conditions. This could lead to greater liability shifting to the user and onto the admins that manage pages and groups on the various platforms. It is also likely that we’ll see more incidents of account hacking and impersonation. Cybercrime is increasingly prevalent, and many users don’t protect their social identities online. Given that many of us use our social media profiles to log into other sites, this could have far reaching ramifications, both from a financial and reputational perspective,” emphasised Colman. 

“Brokers do obviously need to make sure their clients are adequately insured, so its worthwhile checking out the defamation coverage in their liability policies, but 2021 is the year of risk management. There will be some risks that cannot be insured (such as the defamatory/controversial content generated by employees on their personal profiles) which means that brokers need to help their clients to properly manage the exposure.

Having proper social media usage rules embedded into human resources policies go a long way to creating awareness and providing a disciplinary framework for dealing with rogue tweeters. There are also a number of technological tools on the market which help companies to manage their online reputation. These should be investigated by brokers, and discussed with clients,” concluded Colman. 

Writer’s Thoughts
There is no doubt that social media has helped drive increased frequency of liability claims. Although beneficial to many brands and organisations, with greater liability, do you believe social media does more harm than good? If you have any questions please comment below, interact with us on Twitter at @fanews_online or email me - [email protected]



Added by nathan kannemeyer, 20 May 2021
Brilliant and informative, Simon Colman.
Report Abuse
Added by Allan Duff, 20 May 2021
To me this is an exceptional article and worth keeping as a reference. It makes very good sense.
Report Abuse

Comment on this post

Email Address*
Security Check *
Quick Polls


A recent discussion on the ‘successful intermediary of tomorrow’ offered some tips to help financial and risk advice practices to thrive through 2022 and beyond. Which of the following do you think will give your practice an edge over the competition?


Achieving cost and scale through digitalisation
Offering customisable product solutions to meet customers’ unique needs
Specialising in one advice discipline only
All of the above
fanews magazine
FAnews June 2022 Get the latest issue of FAnews

This month's headlines

A free smoothie does not make a loyal customer
Consequential loss policy court cases
Everything you need to know about death, disability and severe illness cover post-emigration
Are advisers doing all they can for clients’ portfolios?
Financial advisers need help - navigating the complex ESG fund environment
Subscribe now